The River Club Community Association, Inc.v.Escalante River Club, LLC
A homeowners association and a country club owner disagreed over a contract governing recreational facilities in their planned community. After the owner sued, the association sought arbitration, but the trial court stayed it and decided that the claims fell outside the agreement. The Court of Appeals held that the parties had incorporated American Arbitration Association rules giving the arbitrator authority to decide whether a dispute is arbitrable. The trial court also went too far by weighing the merits of the association’s claims while resolving the arbitration request. The court reversed and directed dismissal of the owner’s lawsuit without prejudice, leaving the arbitrator to decide the threshold question and any covered dispute. The ruling explains how incorporating arbitration rules can shift the initial decision about a dispute’s scope from a judge to an arbitrator.
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